It is well recognized that abnormal vascular smooth muscle cell (SMC) differentiation or alterations in SMC phenotype play critical roles in the pathogenesis and progression of several prominent cardiovascular disease states including atherosclerosis, congenital heart diseases, aortic aneurysm, hypertension, and restenosis. Transforming growth factor-2 (TGF-2) and its signaling molecules play important roles in SMC differentiation and phenotypic modulation. The molecular mechanisms governing TGF-2 function, especially the downstream target genes responsible for the initiation of SMC differentiation and SMC maturation, however, remains largely unknown. Our published data have shown that response gene to complement 32 (RGC-32), a novel TGF-2 downstream target, is essential for SMC differentiation from neural crest progenitor cells. Preliminary studies demonstrate that RGC-32 is required for TGF-2-induced SMC differentiation from human embryonic stem cell- derived mesenchymal stem cells (huMSC). Moreover, RGC-32 appears to be important for both SMC differentiation and maturation. The goals of the current proposal are to test the overall hypothesis that RGC- 32 activates SMC differentiation and promote SMC maturation through interaction with different nuclear factors. We propose three specific aims to test this hypothesis using a combination of molecular, cellular and genetic approaches. In Aim 1, we will test the hypothesis that RGC-32 activates SMC differentiation by interacting with Smad proteins. The mechanism underlying RGC-32 function in SMC differentiation will be explored by testing the physical and functional interaction of RGC-32 with Smad proteins in activating the transcription pathway of early SMC marker genes 1-SMA and SM221. In Aim 2, we will test the hypothesis that RGC-32 interacts with myocardin to stimulate SMC maturation. The importance of RGC-32 in the formation of contractile SMC phenotype will be determined by morphological, biochemical and contractility assay in huMSC and rat aorta SMC. The physical and functional interaction of RGC-32 with myocardin in inducing SMC contraction will also be tested. In Aim 3, we will test the hypothesis that RGC-32 is essential for SMC differentiation in vivo. The role of RGC-32 in SMC differentiation will be determined using RGC-32 knockout mouse model. The effect of RGC-32 gene knockout on the activation of SMC marker gene transcription in vivo will be tested using SM221 promoter-driven LacZ transgenic mouse model. Collectively, the planned studies will yield novel insight into cellular/molecular mechanisms that control SMC differentiation and maturation, which will ultimately contribute to the development of novel therapeutics for the treatment or prevention of SMC-related cardiovascular diseases.